11 Reasons Why Renting Equipment is Better than Owning it
Many industries require the use of heavy equipment. Some of the industries that make use of heavy equipment are the construction industry, Agriculture, Landscaping, Mining and the Recycling industry among others.
From the several industries, the construction industry requires the use of heavy equipment at every stage of various projects. Small construction companies face different work scenarios than large construction companies. While renting heavy equipment is beneficial to both large and small construction companies, small construction firms tend to especially benefit from renting heavy equipment rather than owning the same.
Let’s take a look at how small construction firms benefit from renting heavy equipment
Ease on Budget and Finances
Since smaller companies have lower capital, renting equipment is a better financial option than buying heavy equipment. Buying heavy equipment may prove to be a financial burden on your company’s budget. However, renting heavy equipment can ease the financial burden of the company. Other departments can utilise this money.
For example, outright purchase of forklifts or man-lifts may cost a huge amount of money, but renting the same will not cost as much as purchasing the same. This will reduce your capital expenditure drastically.
Renting equipment allows the company to have an huge selection of equipment and machinery depending on the need of the project. On the other hand, when a firm buys equipment it limits the use of that particular item. If a company is going to use particular equipment or machinery just once, then it is more advisable to rent it for the particular task at hand.
Shorter Duration of Maintenance and Repairs
Equipment and machinery have maintenance and repair costs due to their natural wear and tear. However, maintenance and repair costs on rented equipment will be lower than permanent repair costs for purchased equipment.
While renting equipment for a specific duration of time, it follows that maintenance and repair for such equipment will be carried out only for the period of lease or rent. Once the equipment has been forwarded to the equipment lessor, the maintenance and repair costs cease to exist for the firm.
Also renting equipment saves the company time and money spent in servicing equipment. The lessor shall hand over well-serviced machinery to the lessee. There is a smaller chance of breakdown of machinery while on rent, as the lessor will have to ensure serviced and good condition machinery.
When purchasing equipment and machinery, companies have to consider the depreciated value of the machinery with every passing year. This depreciated value of the machinery and equipment will be considerably less than the initial investment for purchasing it.
Renting heavy equipment eliminates the problem of the depreciated value of the equipment.
Eliminates the Problem of Idle Machines
Renting heavy equipment allows you to lease machinery when it is required in a project. Whereas, when a firm purchases equipment for one project, it may not make use of it in another project or may not use it at a different stage in the same project. This gives rise to idle machines. The efficiency of machines lying idle decreases.
Solves Storage problems
Leasing or renting heavy equipment solves the problem of storage of this heavy equipment and machinery when it is not in use. Heavy equipment occupies large spaces. Further, additional expenses such as renting and maintaining storage facilities or warehouses will add to the company’s financial burden. Moreover, if not stored properly, equipment may rust and depreciate.
Renters Enjoy Functional Benefits
When equipment or machinery is leased by the construction firm, it is taken on an undertaking that the equipment is in good and workable condition. The onus is on the lessor to provide functional equipment to the lessee.
Many large and small construction firms take up projects at different sites within the city, state or even within the country. With interstate projects, it is difficult and expensive for companies to transport owned heavy equipment from the storage facilities to the site. In such cases renting the equipment from lessors located closer to construction sites is more advisable.
There are several tax benefits for rented equipment. Usually, renting equipment is not considered a liability on a balance sheet. Moreover, as mentioned above depreciation in the value of purchased equipment may be a financial burden on the company.
In Sync with Government Regulation
The use of heavy equipment and machinery requires certain Government compliances. For example, machinery with certain emissions will have to comply with Government policies regarding the extent of emissions permitted. These government rules change from time to time, making it difficult to keep track of these rules for all purchased machinery. However, when equipment is rented, the onus lies with the lessor to provide the machinery with all up-to-date documents and compliance.
Expect the Latest Technology
Leasing or renting heavy equipment rather than purchasing it is always advisable because, with advancements in technology, machinery gets obsolete sooner than it arrives. With every passing year, newer and more advanced technology enters the construction industry. Permanently purchasing heavy equipment makes it impossible to take advantage of newer technology. On the other hand, renting equipment allows you to hire new equipment that works more efficiently.
Heavy equipment rentals add a logistical advantage to the company. The company does not have to waste manpower for servicing, transport, fluid checks, oil changes and other such tasks.
Browse our catalogue for heavy equipment rentals. Our wide range of equipment and machinery meets the needs of various industries.